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Twitter enters market of mobile payment services

Twitter moneyAfter Apple, Google and Facebook, another tech giant is entering the market of mobile payment services: Twitter recently announced that it will allow its customers in France to transfer money with tweets. The social network is teaming up with Groupe PBCE, one of France’s largest banks, to make this possible.

The announcement came as no big surprise. Only a few weeks ago Twitter launched a pilot project of a button to make purchases on site. This ‘Buy Now button’ allows users to shop from selected merchants and artists directly from the social network. In July Twitter announced the acquisition of CardSpring, a payments infrastructure company.

Facebook and Twitter seem to be involved in a race to embrace e-commerce. But why? According to Mashable this ‘may help bring in additional revenue streams, assuming they eventually take a cut of sales or charge to implement the Buy buttons. But the bigger goal for both social networks, according to analysts we spoke with, may simply be to use commerce as a way to boost engagement among users by giving them more reason to stay on site as well as provide an additional selling point to advertisers.’

Social networks increasingly are competing with more traditional financial services providers, as was discussed in the blog post Un-banking of Europe and the US. Consumers no longer solely depend on banks or credit card companies to make payments. Social media companies are eager to get a hold of a part of this revenue stream.

Twitter’s payment service is pretty easy to use, according to Venture Beat: it starts with downloading the S-Money App from BPCE and filling in credit card information. After connecting the app to your Twitter account, you will be able to pay with a tweet using predefined symbols and words:

There are some restrictions, though: the pilot is limited to French bank account owners. Also, there is a maximum of €250 transferred to individuals, and €500 to associations doing some kind of campaign or fundraising.

The hashtag #TweetezPayez is quite popular, but it seems few people are actually using it to transfer money; most tweets only mention the announcement of the pilot project.

An obvious drawback of the system is that all payments are public: ‘So you have to think about what kinds of payments you want the world to know you’re making’, warned Chris O’Brien on Venturebeat.

It remains to be seen how popular the service will turn out to be eventually. Despite the fact that the announcement generated a huge media buzz, right now Twitter is ‘just letting banks experiment with peer-to-peer payments services’, according to Mashable: ‘A source close to Twitter told Mashable that the arrangement was not a “partnership,” but rather a third party arrangement, not unlike the way businesses like Starbucks and Amazon have used Twitter for various ecommerce promotions.’

It may not be the final move of Twitter in the mobile payment market, but it is a serious signal that the company has ambitions in this space.

This article was posted in E-commerce.

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